Monday, November 21, 2011

The 6 Things I've Learned in My First 5 Days

Lot18 really is a startup:
  1. People are crammed into the office. I can reach out and touch five people without moving my desk chair.
  2. Everyone is bleary-eyed and bushy-tailed, especially the Dev team, which just closed out a major relaunch of the site.
  3. The people who have been with the company for four months are considered the veterans.
  4. What was very recently a record-setting month for the company is now a good week.

But it's very different from any startup I've ever seen:
  1. Every day at 5pm, people start drinking wine. Every day. (It took me until Friday to join in.)
  2. There are NO water glasses in the office. Nearly everyone drinks their chilled, filtered water out of an enormous wine glass.

Announcing My New Gig

I’m especially grateful this Thanksgiving. After five whirlwind years at and an exhilarating year at Gilt City, I’ve just joined Lot18 as VP of Product. In case you’re not familiar with the company, Lot18 -- based here in NYC -- gives its members exclusive, limited-time opportunities to purchase directly from wineries, gourmet-food producers and other makers of artisanal goods. If you like good wine and delicious food, sign yourself up right now:

I’m tremendously excited to join the whip-smart team here. Lot18 is just a year old, but is already 90 people strong and has grown each month of its existence. The site experience is smooth, the customers are loyal and passionate, and the wineries are sharing their Lot18 success stories throughout the industry. Just before I started here, Lot18 announced a $30 million round of financing from top-tier VC firms Accel, NEA and FirstMark. All the signs point to a huge success in the making, and I’m thrilled to be a part of it.

One last note before I let you go: Lot18 launched a corporate-gifting program last week. There are some incredible wine (and gourmet food) packages available for your clients and employees. Check it out here:

Happy Thanksgiving!

Monday, September 19, 2011

Mediocre Pumpkin

Since I started looking for my caffeine fix, I haven't tried the same thing twice. Today, I took the seasonal route.

Today's Effort: Pumpkin Spiced Latte
Verdict: Meh. Didn't taste like coffee, which is good. But it just wasn't that great. If I want pumpkin (pie) flavor in the future, I'll stick to the Chai Latte.
Old People: My neighborhood Starbucks was rocking out to the Beatles today, and everyone with gray hair was signing along. I'm holding out for AC/DC before I join in.

Sunday, September 18, 2011


It's a beautiful, crisp fall Sunday in NYC. After going caffeine free yesterday, I'm back at it today.

Today's Effort: White Chocolate Mocha from Starbucks
Verdict: Delicious. I'm definitely getting this one again.
Continuous Improvement: Started fall swimming lessons for my daughters today. So fun to swim with them. They love it.

Friday, September 16, 2011

Hot Coffee & Preschool

Chilly morning today. After walking my daughter to her new preschool for the first time (her fourth day, our first walk together), I stopped off at Starbucks for a croissant and some warm caffeine.

Today's Effort: Cinnamon Dolce Latte.
Verdict: Good. Last couple sips were a little bitter, but I'd call it a success.
Morning Highlight: The walk to school was a joy. She skipped and ran the whole way before exploding into the classroom with her new friends, new teachers and Freddie the class turtle. I feel blessed.

Thursday, September 15, 2011

Hustle & Grind

If you're starting a new company, you've got a lot of hard work in front of you. But not all hard work is the same. You need to hustle and you need to grind.

Hustling is meeting people, getting in front of potential partners, customers, users, journalists, co-founders, teammates, investors, advisors, industry experts, etc. You've got to be persistent, and you have to be selling, always. Hustle is Tristan Walker badgering Foursquare until they hired him... and then quickly closing a bunch of BD deals. Hustle is Alexa von Tobel dropping out of HBS to raise money for Learnvest and hitting the PR circuit. Hustle is Alexandra Wilkis Wilson signing brand after brand after brand for Gilt back in the early days, when it was a new idea no one had ever heard of.

Grinding is putting your head down and powering through work: coding, building excel models, putting together presentations, answering customer emails, wireframing, thinking through edge cases, writing copy, trafficking ads, assembling data, writing job descriptions, reviewing resumes from (and replying to) job applicants, hammering through all kinds of repetitive tasks that have to be done. Grinding is Michael Shafrir and my kickass community team at TheLadders finding and approving jobs for what felt like 100 hours a week back in '04. Grinding is Marc Cenedella reading all 160,000 customer service emails in our first three years at TheLadders. Grinding is much harder to see, and it's much less sexy. You don't hear about it as much, but that doesn't make it any less important.

You can only succeed when you have both. Hustle without grind means empty promises, and grind without hustle means a ghost town with a fresh coat of paint. The difficult thing is that I've only met a few people who are truly great at both aspects of hard work.

As you're starting your company and building a founding team, this is something you should think about. Who's going to hustle? And who's going to grind? Do you have enough of both?

Me? I'm a decent hustler, but I find it exhausting. On the other hand, getting into a good groove at the keyboard with my headphones on is energizing. When I get rolling, I'll forget to feed myself, and I'll find myself feverishly tapping away at 3am. I'm a grinder.

What are you?

Plain ol' Coffee

Back to coffee after yesterday's tea.

Today's Effort: Regular hot coffee today with cream (or was it milk?) and sugar at L'Express this afternoon.
Verdict: Not bad. I finished my cup, and I didn't even resort to a second (or third) packet of sugar.
Neighborhood Note: Grabbed lunch at Terakawa Ramen before my coffee stop. It's a hole in the wall with shockingly bad service for a Japanese joint, but the ramen hits the spot.

Wednesday, September 14, 2011

Caffeine Search Continues

Took a day off from coffee and tried tea this morning.

Today's Effort: Iced Chai from The Bean near Union Square.
Verdict: Tastes like pumpkin pie with whipped cream. I thought it was delicious at first, but I didn't end up finishing it.
Extra Crunch: The baby cockroach creeping up the wall as I sipped my tea concoction certainly didn't help anything.

Tuesday, September 13, 2011

Finding Coffee

I've never been a coffee drinker. I used to only drink coffee in Europe and Asia, but I thought I could use a little more caffeine in my life. Coke wasn't doing it, and everyone seems to enjoy coffee. I thought I'd give it a shot.

Turns out I don't like the taste of coffee. I've been trying various coffee-ish drinks from Starbucks for the last couple weeks, trying to find something I enjoy.

Today's effort: Grande Iced Caffe Mocha
Verdict: Blech. I haven't been able to drink more than a third of it.
Silver Lining: Starbucks' glazed old fashioned donut isn't half bad, and it brings back memories of Colonial Donuts on Lakeshore Ave back home.

If you have a suggestion for a delicious high-caffeine drink I might enjoy, please leave me a comment.

Friday, June 3, 2011

Ghosts of Bubbles Past

Brilliant, and timely:

To highlight this point, consider the absurd example of a Web-based company whose core service is to sell dollars for $0.85 each. This company could obviously achieve record visitors and page views at its Web Site. Revenue growth would easily set records, and it is quite conceivable that sales could reach into the billions within the first few quarters of operation. Apply even the most conservative Internet price-to-revenue multiple to this franchise and we are talking about a multi-billion dollar market cap.

...from 13 years ago. @bgurley via @cenedella

Thursday, June 2, 2011

Notes on the Groupon S-1

Couple notes:
  • Growth has been preposterously good.
  • Groupon spent $180mm on customer acquisition in Q1 '11 and grew by a net of 33mm subscribers. That's $5.45 per net subscriber.
  • Their margins are 42%, and not the 50% they so often claim. Now that their average take is public, will they still be able to talk people into giving them 50%?
  • Rob Solomon earned 6.8% of the company for about a year's work. What the hell kind of vesting schedule was that? Was he going to earn 25% of the company if he stuck around for a normal 4-year vesting schedule? Or was Groupon generous enough to vest 100% of his shares after only a year? Seems ludicrous.
  • I find it more than a little odd that they ignore their marketing expenses when determining CSOI - one of the three key metrics they watch.
  • More than half their revenue is from their International operations
  • "We also offered several national deals to generate revenue and increase brand awareness, which reduced our gross margin."
  • "We have focused the majority of our marketing spend online, particularly on social networking websites and search engines as part of our new subscriber acquisition strategy."
  • In an effort to find some negative numbers in the Groupon filing, I see the following: Percent of subscribers who have ever purchased is down 25% from Q1'10 to Q1'11; revenue per merchant is down 25%; Groupons sold per merchant are down 18%; average Groupon price is down 9% to $23.
  • In the last quarter, Groupon's net cash from operations was $18mm. The biggest factor there was "a $121.2 million increase in our merchant payables, due to the growth in the number of Groupons sold". Holy cash flow!
  • "For example, in December 2010, we partnered with Redbox to offer a daily deal to their user base and we acquired over 200,000 new customers through that offer and in March 2011, we partnered with eBay to offer a daily deal to their user base and we acquired over 290,000 new customers through that offer." Big deals!
  • 7,000-person headcount includes 3,500 sales people, 410 "city planners", 925 editorial staff, 277 merchant services personnel, 825 customer service reps, 253 in Tech
  • "As of March 31, 2011, we had 1,724 employees in our North America segment, consisting of 811 corporate and operational staff, 661 sales representatives and 252 customer service representatives"
  • Groupon's new COO is making a killing. $500k base, $500k bonus, 1.1mm shares (300k of which vest immediately)

The following bullet is going to deserve its own section:
  • "The Q2 2010 cohort included 3.7 million subscribers that we initially spent $18.0 million in online marketing to acquire in the second quarter of 2010. In that quarter, we generated $29.8 million in revenue and $12.8 million in gross profit from the sale of approximately 1.2 million Groupons to these subscribers. Through March 31, 2011, we generated an aggregate of $145.3 million in revenue and $61.7 million in gross profit from the sale of approximately 6.3 million Groupons to the Q2 2010 cohort. In summary, we spent $18.0 million in online marketing expense to acquire subscribers in the Q2 2010 cohort and generated $61.7 million in gross profit from this group of subscribers over four quarters."
  • From the bullet above, we can extrapolate that it took about four months for Groupon to make their money back on a per-subscriber basis.
  • The average new member cost $4.86 and delivered $3.46 in gross profit during Q2'10, nearly paying off immediately. Over the next three quarters, that same group of people delivered an average gross profit of $4.41 per quarter for a total first year gross profit (ignoring acquisition cost) of $16.68.
  • Groupon members seem to be spending more the longer they're members. (Although the Q2 profit/member metric might look unduly low because of members who joined at the very end of Q2, leaving themselves little time to contribute to those Q2 profit numbers. Wouldn't it be helpful if Groupon shared the profit per member during the member's first 90 days - instead of the arbitrary Q2...?)
In summary, Groupon's S-1 filing is a fascinating document about a fascinating company. Lots to learn from in there...